Posts Tagged ‘HUD’

  • Bringing the Generations Together

     

    Bringing the Generations Together

    By Salvatore(Sam) Ruta
    Choice Properties

    Although your home may have been housing a traditional family of a mom, dad and two kids, savvy real estate agents will tell you that in order to attract more buyers, staging your house as one fit for multi-generations is the way to go.
    More parents and grandparents are finding a need to move in with family, as many can no longer afford the increasing rates of the adult communities where they once lived. Furthermore, the economic climate is forcing many kids to return home once their schooling is done.
    A recent multi-generational study conducted by the Pew Research Center, Washington, D.C., revealed that multigenerational living has been on the rise over the past decade, fueled by demographic and cultural shifts.
    “One of the things that struck me about this change is that it’s coming from all directions,” said Paul Taylor, author of the report. “More young adults are moving back home, more elderly are moving in with their middle-age children and more middle-aged children are moving back with their elderly parents.”
    Data from the study shows that in the 10-year span between 2000 and 2009, the number of households practicing multi-generational living increased to 33 percent, with more than 49 million Americans currently living in homes with three or more generations.
    Real estate professionals are tending to highlight features such as finished walkout basements and bonus bedrooms today more than ever. That’s why when your agent tells you that switching out your office or transposing the basement play area to one that resembles more of a bedroom is the way to go, you should be listening.
    When selling your home, you need to look at the process from the perspective of all buyers, not just yours. Consider how a multi generational family might use the various spaces available, and give prospective homebuyers options to easily transform from single-family to multi generational living.
    Therefore, any home that contains bonus space is a viable candidate for a multi generational buyer who’s planning to bring an ill or out-of-work family member back into the fold.
    Experts agree that intergenerational living is easier when each family subunit has its own space. “Everyone who is going to share the home should have a private area of their own,” said Amy Goyer, a multigenerational expert at AARP. “It is best if there is more than one common area so that children and adults have spaces to relax in without everyone having to spend all their free time in the same room together.”
    Multigenerational house design can be applied to just one structure or can be accomplished with two or three units to keep families together while preserving their independence and privacy.
    According to Cam Marston, author and founder of the research firm Generational Insight, there are a number of benefits for different generations of a family living together. “It’s less expensive, obviously, but more importantly, they can learn from one another,” Marston said. “Separating generations keeps them aloof from the trends and important things impacting each generation. When they are all under one roof, they can grow up sooner and stay young longer. It works on both ends of the generations.”
    Another thing for home sellers to consider when it comes to attracting multigenerational buyers is the home’s accessibility for people who might be living with aging parents who use wheel chairs or walkers.
    Creating a complete, accessible living space on one level with safety features can make a home attractive to people of all ages.

  • Buy an investment property? Now is a great time thanks to FANNIE MAE.

    Well lets see, I can sit around thinking about the Presidential election and come up with some esoteric, ideological baloney that no one will believe anyway or actually give you some interesting real estate investment information that might even make you a couple of bucks if you act to buy some property.
    Well I picked this up from our friends at the National Association of Realtors. Seems like Fannie Mae is going to give a break to so called “Mom and Pop” Investors. You can now purchase up to 20 properties now and get a Fannie approval. The underwriting for those mortgages…. well that is a whole separate article that we can discuss later and that I would place under the heading of “Miracles in La La Land”. Oh ye of little faith. But what the heck. Give me a call if you have any questions. Good stuff.

    Visit houselogic.com for more articles like this.

    Copyright 2012 NATIONAL ASSOCIATION OF REALTORS®

  • Downsizing is on the upswing but it isn’t easy.

    Consider the Emotional Side of Downsizing Your Home

     

    By Salvatore Ruta

    Choice Properties

     

    People downsize for a variety of reasons, from the “empty nest” syndrome to convenience or hardship. Here are a few things to consider as you contemplate moving to a smaller home.

    “Before any move, focus on how you want to live. People don’t think enough about why they’re moving,” said Mary Jo Zeller, director at Gero Solutions, which manages moves for seniors. “Increasing numbers of downsizers these days want to exchange the worry and expense of maintaining a large property, for the luxury of low maintenance and the opportunity for more leisure time.”

    Emotional ties to the family home is one of the main barriers to downsizing, but equally, deciding on where to move to, and what style of property will be best suit, can be just as daunting a prospect.

    During the downsizing process you may be surprised at how attached you have become to your possessions and how difficult it might seem to part with them. A good tip is to start getting rid of your items a few months before your move so donate, recycle, e-bay and give away some of those items you really don’t need anymore. This will make the move much easier and your smaller home less cluttered.

    Decorators recommend sketching floor plans for your new home to see where all your current furniture will fit. You shouldn’t wait until you move in to discover that there’s just no room for that armoire or extra stools.

    For those already on the top of their property ladder, they may find that reversing course and heading down is the right decision for them.

  • You’re Credit Challenged?

     

    These guidelines can be a little tedious to work through, but if there is any strong advice that I can offer,  its to plow through the paperwork and work with an experienced real estate agent and mortgage officer. If you do,   and you are looking for that Lehigh Valley home for sale you have a great chance to get the home of your dreams.

    Many Credit Challenged Buyers Purchase HUD Homes!

    FHA underwriters have a great deal of discretion when they decide who will be approved and who will not be approved for loans. They are allowed to use compensating factors to offset conditions when a borrower’s profile falls outside general loan parameters. Any compensating factor used to justify mortgage approval must also be supported by documentation.

    The table below describes the compensating factors that may be used to justify approval of mortgage loans with ratios that exceed FHA benchmark guidelines.

    COMPENSATING FACTORS BENCHMARK GUIDELINES

    Compensating Factor Guideline Description
    Housing Expense Payments The borrower has successfully demonstrated the ability to pay housing expenses greater than or equal to the proposed monthly housing expenses for the new mortgage over the past 12-24 months.
    Down Payment The borrower makes a large down payment of 10 percent or higher toward the purchase of the property.
    Accumulated Savings The borrower has demonstrated· ability to accumulate savings, and· a conservative attitude toward using credit.
    Previous Credit History A borrower’s previous credit history shows that he/she has the ability to devote a greater portion of income to housing expenses.
    Compensation or Income Not Reflected in Effective Income The borrower receives documented compensation or income that is not reflected in effective income, but directly affects his/her ability to pay the mortgage.This type of income includes food stamps, and similar public benefits.
    Minimal Housing Expense Increase There is only a minimal increase in the borrower’s housing expense.
    Substantial Cash Reserves The borrower has substantial documented cash reserves (at least three months worth) after closing. The lender must judge if the substantial cash reserve asset is liquid or readily convertible to cash, and can be done so absent retirement or job termination, when determining if the asset can be included as cash reserves, or cash to close.Funds and/or “assets” that are not to be considered as cash reserves include· equity in other properties, and· proceeds from a cash-out refinance.Lenders may use a portion of a borrower’s retirement account, subject to the conditions stated below. To account for withdrawal penalties and taxes, only 60% of the vested amount of the account may be used. The lender must document the existence of the account with the most recent depository or brokerage account statement. In addition, evidence must be provided that the retirement account allows for withdrawals for conditions other than in connection with the borrower’s employment termination, retirement, or death. If withdrawals can only be made under these circumstances, the retirement account may not be included as cash reserves. If any of these funds are also to be used for loan settlement, that amount must be subtracted from the amount included as cash reserves. Similarly, any gift funds that remain in the borrower’s account following loan closing, subject to proper documentation, may be considered as cash.Note: Reserves from retirement accounts and gifts as described above may be considered as cash reserves when scoring the mortgage application through TOTAL.Reference: For information on acceptable sources of cash reserve funding, see HUD 4155.1 5.B.
    Substantial Non-Taxable Income The borrower has substantial non-taxable income.Note: This applies if no adjustment was previously made when computing ratios.
    Potential for Increased Earnings The borrower has a potential for increased earnings, as indicated by job training or education in his/her profession.
    Primary Wage-Earner Relocation The home is being purchased because the primary wage-earner is relocating, and the secondary wage-earner· has an established employment history· is expected to return to work, and· has reasonable prospects for securing employment in a similar occupation in the new area.Note: The underwriter must document the availability of the potential employment.

     

    I have worked with several good bankers and mortgage pros over the years. If you want to consider a home purchase, my suggestion is to start with the financing. With a credit approval and estimate of home purchase in hand, you will be way ahead of others  in a similar credit situation.  Email or call me for a recommendation.

  • What is the Best Way to Finance a HUD Home?

     

    What Is the Best Way to Finance a HUD Home?

     

    FHA financing is the best way to finance a HUD Home for most buyers.

     

    FHA has certain advantages over conventional financing:

     

    • The total down payment for an FHA loan is only 3.5% of the sale price. (This number may increase in the near future. The down payment amount may also change to reflect risk factors in credit score. Check with your loan officer for the most up-to-date information.)

     

    • Debt-to-Income Ratios  are generally higher with FHA loans. Buyers can qualify with 29%  Front End Ratio  and 40% Back End Ratio , compared with similar conventional products that limit borrowers to 33-36% on the back end. Borrowers have more borrowing power with an FHA loan.

     

    • Example (front end): Monthly Income x 29% = Maximum PITI (principal, interest, taxes, and insurance). For a monthly income of $3, 000, that means that $870 is the maximum mortgage payment for qualifying purposes.

     

    • Example (back end): Monthly Income x 40% = Maximum PITI (principal, interest, taxes, and insurance). For a monthly income of $3,000, that means that $1,200 is the maximum mortgage payment for qualifying purposes.

     

    • FHA lets the buyer negotiate a 3% seller assist toward closing costs. In many cases, a borrower needs no more than 3% of the total sale price as a total cash-out-of-pocket investment. There are other alliances and programs that will let the seller pick up the whole tab. Some of these plans are under close scrutiny by the U.S. Internal Revenue Service.

     

    • FHA is more lenient with credit issues than conventional lenders. Even bankruptcy discharges can work with FHA if good credit follows the discharge. FHA underwriters give much credence to letters of explanation about credit recitals.

     

    HUD Homes offered with FHA financing offer special incentives to buyers. HUD Homes eligible for FHA 203(b) financing have reduced closing costs because there is NO APPRAISAL fee. Lenders are required to use the appraisal that HUD has on file if the appraisal is less than 150 days old. (If you sell a HUD Home near the end of the 150-day window, you can make a written request to HUD to extend appraisal validity 30 days, to 180 days. That request must be in writing two weeks before the 150 day appraisal expiration date.)

     

    Keep in mind an important fact about FHA financing for HUD Homes:

     

    FHA will only finance a maximum loan amount that corresponds to HUD’s asking price. If a buyer is inclined to “bid up” a property and finance that property with FHA financing, he will have to make up the difference between the asking price and the bid amount with additional down payment monies.

     

    For instance: A buyer expects that there will be competing bids for a house at 123 Main Street. HUD’s list price is $85,000. The buyer is confident that the real value of the property is closer to $100,000. He bids $90,000. His down payment will increase from 3.5% of $85,000 ($2,975 down payment) to that amount PLUS an additional $5,000 ($6,912 down payment).

    I know that I mentioned this in my  last blog, but here is a good primer on searching for a loan for your new home. Click here for the video.

    Remember if you want a list of already approved HUD Homes or have in mind a conventional purchase using FHA financing, give me a call at 610-737-2310 or email me at samruta@yahoo.com.  Start your search on the right at the  Lehigh High Valley link.

     

  • Buying a home HUD FHA

     

    There are numerous resources out there to guide one through the buying process for an FHA HUD home. Wether you are comtemplating a resale home, or a foreclosure. The following video which is closed caption provides some good basic information in starting your search.  Then we will followup with an FHA Loan Checklist.

    Buying an FHA HUD Home (Closed Caption)

     

    FHA Loan Checklist

     

    Here is a list of documents you will need to apply for an FHA loan:

    • Address of place of residence (past two years)
    • Social Security numbers
    • Names and location of employers (past two years)
    • Gross monthly salary at current job(s)
    • Pertinent information for all checking and savings accounts
    • Pertinent information for all open loans
    • Complete information for other real estate owned
    • Approximate value of all personal property
    • Certificate of Eligibility and DD-214 (for veterans only)
    • Current check stubs and W-2 forms (past two years)
    • Personal tax returns (past two years), current income statement and business balance sheet for self-employed individuals

     

     

  • Where Can I Get Updates About New HUD Homes?

     

    Where Can I Get Updates About New HUD Homes?

     

    The BEST place to get information about HUD Homes is HUDHomeStore.com , HUD’s superstore site.

     

    HUDHomeStore.com is a one-stop platform containing everything you need to know about the HUD REO sales program:

     

    • HUD property information;

     

    • Property disclosures and addenda;

     

    • Real estate and consumer registration features;

     

    • Interactive maps on home page, special programs pages, and property detail pages;

     

    • Resources and contact information for real estate agents and brokers, consumers, state and local governments, and nonprofit organizations.

     

    The new website features all HUD Homes in the country.  Real estate agents and consumers have the same view of properties, and access to a myriad of resources and contact information.

    Here is a video on how to register for HUD Homes.

    Any questions? samruta@yahoo.com
    Phone; 610-737-2310

  • 50% HUD Homes Discount

    Here’s a program that needs some awareness. Pretty neat.

    Give me a call or email me and I’ll send you a list of homes that meet the requirements.

    Law enforcement officers, pre-Kindergarten through 12th grade teachers and firefighters/emergency medical technicians can become homeowners through HUD’s Good Neighbor Next Door Sales Program. HUD offers a substantial incentive in the form of a discount of 50% from the list price of the home.  In return you must commit to live in the property for 36 months as your sole residence.

     

    How the Program Works

     

    Eligible Single Family homes located in revitalization areas are listed exclusively for sales through the Good Neighbor Next Door Sales program. Properties are available for purchase through the program for five days.

     

    How to Participate in Good Neighbor Next Door

     

    Check the listings at HUDHomeStore.com for your state. Follow the instructions to submit your interest in purchasing a specific home. If more than one person submits on a single home a selection will be made by random lottery. You must meet the requirements for a law enforcement officer, teacher, firefighter or emergency medical technician and comply with HUD’s regulations for the program.

    HUD requires that you sign a second mortgage and note for the discount amount. No interest or payments are required on this “silent second” provided that you fulfill the three-year occupancy requirement.

    The number of properties available is limited and the list of available properties changes weekly.

    Good Neighbor Next Door FAQs

     

    Q: What Is the Good Neighbor Next Door (GNND) Sales Program?

     

    A: HUD wants to strengthen America’s communities. The Good Neighbor Next Door Program offers HUD owned single family (one-unit) homes to eligible participants at a 50% discount.

     

    Q: Am I Eligible for the GNND Sales Program?

     

    A: Law enforcement officers, teachers and firefighters/emergency medical technicians and who meet all other requirements of the program are eligible to purchase an available home.

     

    Q: How Much of a Discount Can I Get on a HUD Home?

     

    A: You can get a 50 percent discount off the HUD appraised value. For example, if HUD lists a home at $100,000, you can buy it for $50,000 provided, you occupy the home as your personal residence for the required occupancy period. If you qualify for any FHA-insured mortgage program, your downpayment is only $100 and you may finance closing costs.

     

    Q: What Kind of Mortgage Financing Do I Need?

     

    A: You may use FHA, VA, or conventional mortgages, or cash. HUD requires you to sign a Second Mortgage and Note on the discounted amount (which is $50,000 in the example above). No interest or payments are required on this “silent second” mortgage if you live in the home for the entire 36 month occupancy period. You may be required to pay a pro-rata portion of the discount to HUD should you fail to fulfill the three year occupancy requirement.

     

    Q:  What is the Occupancy Period?

     

    A: You must live in the home as your sole residence for a full 36 months. The purpose of the program is to strengthen communities by encouraging employed, professional law enforcement officers, teachers and firefighters/emergency medical technicians to live in the community. You will have 30, 90 or 180 days to move into the home you purchase, depending on HUD’s determination of the condition of the home and the level of repairs that may be required, if any. The 30th, 90th or 180th day is the start date for the occupancy period. Your are released from all obligations under this program at the end of the 36th month following the start date. HUD views the occupancy obligation seriously and vigorously pursues violators to the fullest extent of the law.

     

    Q:  What Is an FHA Rehabilitation Mortgage and How Can It Help Me Buy a HUD Home?

     

    A:  The FHA 203(k) mortgage program helps homebuyers buy a home and have enough money to rehabilitate or repair it. Repairs must cost more than $5,000. The cost of the repairs and the mortgage are combined into a single monthly payment. Consider FHA?s 203(b) program if needed repairs are under $5,000. FHA also has a new Streamlined 203(k) program which may be useful. Discuss these financing options with your lender!

     

     

    Q:  Can I Sell the GNND Home after 3-years and Keep the Profit?

     

    A:  Yes. After you live in the GNND home 3 years, you can sell the home and keep any equity and/or appreciation.

     

    Q:  Do I Have to Use a Real Estate Broker or Agent to Buy a GNND Home?

     

    A:   Yes.

     

    Q:  Do I Have to Be a First Time Homebuyer to Take Advantage of the Program?

     

    A:  No. However, you may not own any other residential real property at the time you submit your offer to purchase a home and for one year previous to that date. For example, if you submit an offer to purchase a home on August 1, 2007, you may not have owned a home during the period from July 31, 2006.

     

    Q:  Where Are These Homes Located?

     

    A:  The HUD homes are located in designated Revitalization Areas. There are hundreds of Revitalization Areas located in the United States.

     

    Q:  Does HUD Provide a Home Warranty?

    A:  No. All GNND homes are sold “as is,” without any kind of warranty. You may hire a home inspector, however.

     

    Q:   Can I Buy Multiple Unit Properties (E.g., Duplexes, Triplexes, Etc.) through the Officer Next Door Program?

     

    A:  No. You can only buy single unit homes, townhouses, and condominiums through the GNND Program.

     

    Q:  Do I Have to Pay Earnest Money or Other Deposits in Order to Submit a Contract for a GNND Home?

     

    A:  Yes. The amount of the earnest money deposit required is an amount equal to one percent of the list price, but no less than $500 and no more than $2,000. HUD considers all offers to be a commitment to purchase a home if you are awarded the sale. Therefore, please carefully consider your offer and be aware of HUD’s policy on earnest money as stated here: If an offer is accepted, the earnest money deposit will be credited to the purchaser at closing. If the offer is rejected, the earnest money deposit will be returned. Earnest money deposits are subject to total forfeiture for failure of the participant to close a sale.

     

    Q:  Can I Bargain with HUD on the Price of a GNND Property?

     

    A:   No. You must offer the exact HUD list price when bidding on any GNND property. Then you get a 50 percent discount off of that list price.

     

    Q:  What if I Leave the employment, that made me eligible, for Any Reason, during the Mandatory 3-year Residency Period?

     

    A:  Nothing happens, but you must continue to live in the home for the full 36-month mandatory occupancy period. If you move out of the GNND home, you will have to repay HUD on a prorated schedule. In addition, you must certify that it is your good faith intention to remain employed as a law enforcement officer, teacher or firefighter/emergency medical technician for one year beginning with your purchase. Do no attempt to participate in the program if you know in advance that you will not be employed as required for at least one year.

     

    Q:  Some Agencies Have Other Homebuying Programs. Can the GNND Program Work in Conjunction with These?

     

    A:  Yes, as long as you can meet all the GNND program rules while participating in these other programs.

     

    Q:  What Happens if a Participant Fails to Honor the 3-year Occupancy Requirement?

     

    A:  HUD can demand repayment of the discounted amount on a prorated basis. That means you would have to repay 1/36th of the discount you received for each month that you did not occupy the home. HUD also may initiate administrative sanctions including, but not limited to, barring the officer from participating in any HUD/FHA programs, as well as other federal programs. In any case of fraud or abuse, HUD will refer the case to HUD’s Office of the Inspector General for investigation and possible criminal prosecution. HUD may also notify the officer’s employing agency. Criminal prosecution and conviction for fraud and abuse concerning the GNND Program can result in a fine of up to $250,000 and/or two years in federal prison.

     

    Q:  How Does HUD Enforce the 3-year Residency Requirement?

     

    A:  The participant must certify he or she is living in the GNND home as a sole residence at the time of purchase and each year after that. HUD can conduct spot checks to make sure the GNND home is your sole residence at any time during the 3-year period. You also must sign a note and mortgage for the discount amount. HUD may foreclose this mortgage if you do not comply with the 36-month occupancy requirement

    Don’t forget if  you have any questions contact me using the info on  the right sidebar.

     

  • 5 tips to consider if you are facing a Short Sale

     

    Jan 1. Its spring time as far as I am concerned. The Spring Real Estate Market, that is. It was 20 degrees when I walked out the door, but I could hear the Robins singing. I know a lot of you are thinking “Can I sell my house? Whats the market like? What’s my house worth?  Time to do a little research. First of all if you want to talk to someone about it, give me a call. Glad to listen first and then I’ll ask you some questions. But here thanks to the National Association of Realtors are some useful tips in getting started in thinking about this Short Sale Business. Also listen to the podcast on this subject if you are considering buying a Short Sale property. Email me with any questions at: samruta@yahoo.com

    [audio:http://www.rutaramblings.com/wp-content/uploads/2012/01/Foreclosures-and-Short-Sales11.mp3|titles=Foreclosures and Short Sales]

    What to do if You’re Facing a Short Sale

     

    If you’re thinking of selling your home, and you expect that the total amount you owe on your mortgage will be greater than the selling price of your home, you may be facing a short sale. A short sale is one where the net proceeds from the sale won’t cover your total mortgage obligation and closing costs, and you don’t have other sources of money to cover the deficiency. A short sale is different from a foreclosure, which is when your lender takes title of your home through a lengthy legal process and then sells it.

     

    1. Consider loan modification first. If you are thinking of selling your home because of financial difficulties and you anticipate a short sale, first contact your lender to see if it has any programs to help you stay in your home. Your lender may agree to a modification such as: Refinancing your loan at a lower interest rate; providing a different payment plan to help you get caught up; or providing a forbearance period if your situation is temporary. When a loan modification still isn’t enough to relieve your financial problems, a short sale could be your best option if:

    • Your property is worth less than the total mortgage you owe on it.
    • You have a financial hardship, such as a job loss or major medical bills.
    • You have contacted your lender and it is willing to entertain a short sale.

     

    2. Hire a qualified team. The first step to a short sale is to hire a qualified real estate professional and a real estate attorney who specialize in short sales. Interview at least three candidates for each and look for prior short-sale experience. Short sales have proliferated only in the last few years, so it may be hard to find practitioners who have closed a lot of short sales. You want to work with those who demonstrate a thorough working knowledge of the short-sale process and who won’t try to take advantage of your situation or pressure you to do something that isn’t in your best interest. A qualified real estate professional can:

    • Provide you with a comparative market analysis (CMA) or broker price opinion (BPO).
    • Help you set an appropriate listing price for your home, market the home, and get it sold.
    • Put special language in the MLS that indicates your home is a short sale and that lender approval is needed (all MLSs permit, and some now require, that the short-sale status be disclosed to potential buyers).
    • Ease the process of working with your lender or lenders.
    • Negotiate the contract with the buyers.
    • Help you put together the short-sale package to send to your lender (or lenders, if you have more than one mortgage) for approval. You can’t sell your home without your lender and any other lien holders agreeing to the sale and releasing the lien so that the buyers can get clear title.

     

    3. Begin gathering documentation before any offers come in. Your lender will give you a list of documents it requires to consider a short sale. The short-sale “package” that accompanies any offer typically must include:

    • A hardship letter detailing your financial situation and why you need the short sale
    • A copy of the purchase contract and listing agreement
    • Proof of your income and assets
    • Copies of your federal income tax returns for the past two years

     

    4. Prepare buyers for a lengthy waiting period. Even if you’re well organized and have all the documents in place, be prepared for a long process. Waiting for your lender’s review of the short-sale package can take several weeks to months. Some experts say:

    • If you have only one mortgage, the review can take about two months.
    • With a first and second mortgage with the same lender, the review can take about three months.
    • With two or more mortgages with different lenders, it can take four months or longer.

    When the bank does respond, it can approve the short sale, make a counteroffer, or deny the short sale. The last two actions can lengthen the process or put you back at square one. (Your real estate attorney and real estate professional, with your authorization, can work your lender’s loss mitigation department on your behalf to prepare the proper documentation and speed the process along.)

     

    5. Don’t expect a short sale to solve your financial problems. Even if your lender does approve the short sale, it may not be the end of all your financial woes. Here are some things to keep in mind:

    • You may be asked by your lender to sign a promissory note agreeing to pay back the amount of your loan not paid off by the short sale. If your financial hardship is permanent and you can’t pay back the balance, talk with your real estate attorney about your options.
    • Any amount of your mortgage that is forgiven by your lender is typically considered income, and you may have to pay taxes on that amount. Under a temporary measure passed in 2007, the Mortgage Forgiveness Debt Relief Act and Debt Cancellation Act, homeowners can exclude debt forgiveness on their federal tax returns from income for loans discharged in calendar years 2007 through 2012. Be sure to consult your real estate attorney and your accountant to see whether you qualify.
    • Having a portion of your debt forgiven may have an adverse effect on your credit score. However, a short sale will impact your credit score less than foreclosure and bankruptcy.

    Reprinted from REALTOR® Magazine (RealtorMag.Realtor.org) with permission of the NATIONAL ASSOCIATION OF REALTORS®.

    Copyright 2008. All rights reserved

  • 5 Insider secrets you need to know before you buy a HUD home

    Probably nothing gets me more questions today than the topic of  buying a HUD Home. Here are some quick answers that will help you begin the process of searching out that dream owner occupied or investor owned home.  Any other questions give me a call or e mail me at samruta@yahoo.com

    How can I get the most up-to-date HUD Homes listings and find out when new properties come on the market ?

     A new HUD Homes superstore site is the centerpiece of HUD’s new REO program.  www.hudhomestore.com is a one-stop platform containing everything agents and consumers need to know about the HUD REO sales program:

     

    • ·         HUD property information;
    • ·         Property disclosures and addenda;
    • ·         Real estate and consumer registration features;
    • ·         Interactive maps on home page, special programs pages, and property detail pages;
    • ·         Resources and contact information for real estate agents and brokers, consumers, state and local governments, and nonprofit organizations.
    • ·         Consumers can sign up for property alerts and find out when new HUD homes come on the market.

     

    2

    How do I find a real estate agent who knows about HUD Homes?

     The best place to find a good agent for HUD Homes is right here! That’s why I prepared this report – we aim to help educate buyers about the ins and outs of the HUD Homes sales process. HUD Homes have their own special contracts and their own rules and procedures.

     Not all real estate agents are permitted to sell HUD Homes. Licensed real estate brokers and agents must be registered with HUD prior to submitting bids for HUD Homes.We must renew our application every year to continue to sell HUD Homes.

     HUD Homes are listed in the local multiple listing service. Consumers often have the mistaken impression that any Realtor who is a member of the multiple listing service can sell them a HUD Home. That is not true.

     

     

     

     

    3

    How can I tell if I am eligible to buy a HUD Home?

     Anyone can purchase a HUD Home who has the financial ability to complete the transaction and meets other criteria. HUD Home Buyers fall into several general categories:

     Owner Occupants have first priority in the bidding process. Owner occupants are purchasers who will live in the home for at least 12 months as a primary residence.

     Investor buyers can purchase HUD Homes during certain bidding periods  following a period of time restricted to owner occupants when no acceptable bids were received at HUD.

     Nonprofits and government agencies have special opportunities for “First Look” at HUD Homes when they come on the market.

     Police officers, firefighters, EMTs and teachers are eligible for 50% on select HUD Homes if they meet certain qualifications in HUD’s Good Neighbor Next Door Program.

     

     

    4

    Many HUD Homes need repair. Can I include the cost of repairs in my mortgage?

     One of the most wonderful things about buying a HUD Home is financing flexbillity with FHA financing.

     

    Most HUD Homes are available with FHA financing. When repairs are necessary there is a special type of financing for that – FHA 203(k). You can include almost any kind of repair using FHA 203(k) financing – roofing, flooring, kitchen and bath remodeling, new appliances, heating systems, windows, and more!

     HUD pulls out all the stops to make it easy for you to get into the house of your dreams.

     You can use any lender you wish. Just be sure your lender finances HUD Homes. FHA lenders are usually the best bet for owner occupant borrowers.

     

     

    5

    Why do I have to wait a month before I bid on a HUD Home just because I am investor?

     HUD wants to provide homeownership opportunities and stabilize neighborhoods. HUD believes that owner occupied housing is a stabilizing force in neighborhoods.

     Investors have many opportunities to purchase HUD Homes. They become available when the owner occupant bidding period expires and they come on the market regularly when contracts fall apart and properties are re-listed for sale at HudHomeStore.com

     

    Seasoned investors who work in the HUD Homes market watch their dates closely and time their bids at the appropriate hour. In a sense, it’s like biddin on eBay following an extended bidding period.

    So what are your waiting for? With interest rates at all time lows and with tons of inventory. Better get moving.